Why The Best CEOs Consider Purpose Before Profit

When the Deepwater Horizon oil spill occurred in the Gulf of Mexico in 2010, it was bad news for everyone—including the many oil and gas companies drilling there. The government suspended operations in the gulf until new safety practices could be established, and the lawsuits from (and between) energy companies began to fly. ButNoble Energyfollowed a different strategy.

"Our team took the approach of partnering with the government regulators," says Noble Energy Executive Chairman and former CEO Chuck Davidson, "and we started working on a permit that would use new requirements, new standards, and new types of spill response systems with the government."

Noble Energy's focus on collaboration and partnership paid off. In 2011, theInterior Department approvedthe company's permit to be the first new deepwater drilling company allowed back to work in the Gulf of Mexico. While the company's primary goal had been to prioritize safety and positive relationships, the outcome certainly benefited the business. And Noble Energy's unique approach has led to success stories from Colorado to Israel. How did it happen? Great leadership.

During his tenure as CEO, Davidson worked with business consulting firm Gap International to draw out the best performance in himself and Noble Energy's employees. As Davidson nears his departure from the energy company after more than 14 years of exceptional leadership, he helps us examine what it takes to be a great CEO.

The Power of Purpose

Everything a great CEO does, says Davidson, is grounded in purpose.Consultants at Gap International agree: according to the firm’s white paper on the 21st Century Organization, "when leaders leverage purpose, it creates a competitive advantage that's difficult or even impossible to replicate."

Identifying Noble Energy's purpose was one of Davidson's first steps as CEO. He and his executive team looked beyond some of the obvious missions of an energy company, like building shareholder value and producing oil and natural gas efficiently.

This new purpose reinvigorated employees. It connected them tohowNoble Energy approaches business, not just what it does. And while internal excitement around this purpose was a terrific outcome, the larger benefit was how the mindset of "energizing the world, bettering people's lives" would drive the organization for years to come, Davidson explains.

A commitment to bettering people's lives drove the business to act differently after the oil spill in the Gulf of Mexico; it's what keeps it operating successfully in Israel, even though it can be a challenging regulatory environment.

The purpose also drove Noble Energy to work with the Environmental Defense Fund and state government in Colorado to develop new rules to regulate methane emissions as a part of oil and gas operations, Davidson says. Though that's typically the opposite approach taken by energy companies, it became a priority for Noble Energy because the company was committed to bettering people's lives.

"As we're making decisions about where we're going, we can always ask ourselves, 'Are we being loyal to our purpose?'" Davidson says. "If you get the purpose right, the rest falls into place."

The Qualities of a Great CEO

It can be difficult to identify a truly great CEO in the midst of his or her career. Harvard Business Review releases an annual ranking of the world's best-performing CEOs, examining measurable factors like shareholder return and market capitalization. Davidson was ranked #39 on the list for 2014. Yet, HBR acknowledges there are also many "intangible" measures of great leadership—like environmental impact, employee satisfaction, and customer engagement—that are much more difficult to quantify.

Often, a CEO's success can only be truly measured after years in the role, or even after the person has moved on. But there are certain qualities that top leaders share. Beyond the power of purpose, Davidson describes four more traits of the highest-performing CEOs:

Vision:"A visionary is always looking to the future, always looking around the corner, always thinking about what's possible, what might happen, what could you possibly create," Davidson says. "They're always seeing a new future and then they're taking the organization to it."

Passion for Growth:"Great leaders honestly reflect on what works and what doesn't work. We all make mistakes," he says. "The better leaders appreciate a mistake, they identify what works and they practice and practice and practice." According to Gap International's white paper, "Instead of waiting for current success to dwindle, leaders and organizations with passion for growth seek out opportunity everywhere, applying creativity and curiosity to all aspects of the business."

Communication:"Almost everything a leader does and causes to happen is through communication," Davidson says. "It's about communication...to those we work with, so they also see and share the vision, and are aligned, incentivized, and motivated to carry it out—to execute it."

Collaboration:"Great CEOs listen and they seek a lot of advice from others," Davidson says.

The best CEOs make a lasting impact on their organizations for the better. Those visionaries who ground their companies in purpose and deliver value are few and far between. But by nurturing these qualities, every leader can strive for greatness—for themselves, and their organizations.

A former downtown development professional, Natalie Burg is a freelancer who writes about growth, entrepreneurialism and innovation.

Gap International works with leaders to accomplish the extraordinary by attaining and sustaining breakthrough results. Our clients turn to us to achieve exceptional growth through four main areas: leadership, vision and strategy, execution, and people and culture. As perfor...